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Just a week after it appeared that Ferdinand K Piëch,Volkswagen's powerful chairman, was preparing to throw his hand-picked chief executive and presumed successor under the Microbus, the company announced Friday that the executive, Martin Winterkorn, would have his contract renewed.
Winterkorn "is the best possible" person for his job and has "the full support" of the executive committee of the board, according to a statement from VW headquarters in Wolfsburg, Germany. The board will seek to extend his contract when it expires in February next year.
While the politics surrounding the announcement remain murky, it came after board members held a crisis meeting on the question on Thursday, and it appeared to be a defeat for Piëch. On April 10 he had told Der Spiegel that he had "distanced" himself from Winterkorn. Piëch fired Winterkorn's predecessor, Bernd Pischetsrieder, also once his protege, after similarly hanging him out to dry in the press.
Piëch is a formidable force in the auto industry. As chairman and an important shareholder, his voice counts. But his media outburst took other key board members by surprise - including some among the Porsche family to which he belongs. His cousin, Wolfgang Porsche, and Bernd Osterloh, a Volkswagen employee representative who sits on the board, had publicly backed Winterkorn.
Under Winterkorn's management, VW has risen to the No. 2 spot globally, with 10.14 million unit sales last year, putting it a whisker behind Toyota Motors. But the German carmaker push for growth in the United States has stalled and its profit margins remain far behind the Japanese giant's. Analysts say Piëch appears to have decided that Winterkorn needed to go if those problems were to be fixed.
Andreas Lampersbach, a Volkswagen spokesman, declined to comment beyond the statement.
